LAND for private housing including executive condominiums (ECs) that will be offered by the government in the second half of the year is slightly more than in the first half. This is mainly due to a 39.1 per cent rise in the confirmed list supply to 2,170 homes (no ECs), from 1,560 (635 ECs) in H1.
Putting things in perspective, National Development Minister Lawrence Wong said in a blog post that the increase was to match the actual committed supply of 2,130 units in H1; the number includes the 570 units from a reserve-list site in New Upper Changi Road that was triggered in January this year and subsequently sold the following month.
Reserve-list sites are launched only upon successful application by a developer or when there is sufficient market interest in a site. Confirmed-list sites, on the other hand, are launched according to schedule regardless of demand.
Through the reserve list, MND is offering land for 5,375 homes (780 ECs) – a drop of 8.2 per cent from 5,855 (820 ECs) in H1.
In total, MND will be supplying land for 7,545 homes in the July-December period, up just 1.8 per cent from 7,415 in January-June.
In his blog, “Finding the Right Balance”, Mr Wong noted that “we are mindful that excessive supply in a weak market can exacerbate a decline in prices”.
“At the same time, insufficient supply can result in a future shortage and an unwarranted spike in housing prices when demand picks up. So we will continue to monitor the market closely, and find the right balance to ensure sustainable housing prices and a stable property market.”
In crafting the H2 GLS Programme, the authorities took into account the drop in the number of remaining unsold homes, as well as the corresponding pick-up in new home sales, said Mr Wong.
Urban Redevelopment Authority (URA) data shows that the number of remaining unsold private homes (including ECs) has shrunk to a historical low of 28,890 in the first quarter from 41,447 in Q4 2011. On the sales front, the monthly average rate of 600 private residential units (excluding ECs) that developers moved over the past 12 months is higher than a monthly average rate of 550 units during the same period in the previous year.
The H2 confirmed list includes two new sites – one at Perumal Road and the other at Upper Serangoon Road.
The first site, on the fringe of Little India and next to Farrer Park MRT Station, is expected to draw strong participation due to its “bite-sized” investment. It could yield some 200 homes and a relatively small commercial component of about 500 square metres gross floor area (GFA).
The second site will be the first state land sale in the new Bidadari estate. Located next to Woodleigh MRT Station, the plum parcel is expected to yield 825 homes and 15,000 sq m of commercial space.
The remaining confirmed list sites – on Fernvale Road in Sengkang and West Coast Vale in Clementi – are rolled over from the H1 reserve list.
In the H2 reserve list will also be two new sites – both for housing. One is on Serangoon North Avenue 1, flanked by the Serangoon Gardens landed housing estate and public housing flats. The other is in Toh Tuck Road.
Three sites for mixed-use development comprising mainly office space – along Central Boulevard, Beach Road and Woodlands Square – remain in the reserve list . “These sites will allow developers to initiate the development of more office space if they assess that there is demand,” MND said.
It also revealed that the maximum retail GFA for the Holland Road commercial and residential site (which also remains in the reserve list) and the Beach Road site will be reduced to 6,800 sq m from 13,500 sq m and to 3,000 sq m from 8,000 sq m respectively. This follows a review that factored in the development plans and provision of commercial amenities in the area.
Desmond Sim, CBRE Research head of Singapore and South-East Asia, said: “The state planners have taken into account the current supply-demand imbalance for retail space . . .”
The amount of commercial space in the reserve list remains unchanged at 261,580 sq m GFA, from the same four sites in Holland Road, Central Boulevard, Beach Road and Woodlands Square. On the confirmed list, the supply of commercial space rises to 15,500 sq m from 11,000 sq m.
Mr Sim said: “With the recent strong investor interest in commercial (properties), we will not be surprised should any of the commercial sites on the reserve list be triggered.”
MND continued to freeze the supply of hotel sites on both lists.
Meanwhile, on MND’s factoring of unsold private homes in formulating H2 land supply, JLL national director Ong Teck Hui reasoned that “this suggests the possibility of an increase in the supply of residential land in future sales programme(s) to ensure adequate supply of units over the longer term”.
Savills Singapore research head Alan Cheong, referring to the minister’s comments about the authorities being mindful of excessive supply in a weak market worsening a price drop, said: “It should now be very clear that those who expect the market to come off sharply may want to reassess their views. On a semi-annual basis, the supply side does react to the goings-on on the demand side.”
Wong Xian Yang, OrangeTee senior manager for research and consultancy, noted that the absence of any EC site on the confirmed list reflects the authorities’ concern over the surge in the number of unsold EC units.